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New Jersey May Divert $2.5 Billion Hudson Tunnel Money to Roadwork Fund

New Jersey officials are discussing the possibility of diverting money for the Hudson River rail tunnel toward other transportation projects.

James Weinstein, executive director of New Jersey Transit, said there have been talks in Governor Chris Christie’s administration of using $2.5 billion in state money earmarked for the project for replenishing the Transportation Trust Fund, which finances road and rail work.

“There have been those discussions, but there have been no decisions,” Weinstein said today at an Assembly transportation committee hearing in Trenton.

New Jersey Transit last week froze new spending on an $8.7 billion rail tunnel into Manhattan for a month after the federal government estimated the project may run $1 billion over budget.

“There’s now fear that’s there’s going to be significant higher costs,” Christie, 48, said in a radio interview today on “Bloomberg Surveillance” with Tom Keene. “If it’s going to be that expensive, we’re going to have to go in another direction.”

Trust Fund

New Jersey’s Transportation Trust Fund will run out of money to pay for anything other than debt service on its $12 billion of bonds outstanding by mid-2011. Christie, a Republican who took office in January, said this month he would soon present a plan for replenishing the fund.

Michael Drewniak, a spokesman for Christie, declined to comment on the possible diversion of tunnel money. Weinstein, after the committee hearing, declined to tell reporters whether he supported a diversion of the tunnel money.

“You talk about a range of things,’ Weinstein said. “In the end the governor will make the decision.”

New Jersey broke ground in June on the tunnel to carry trains under the Hudson River in and out of Manhattan, a passageway that officials said would help ease delays for hundreds of thousands of commuters. The decision to suspend new spending follows a five-month review to finalize the federal government’s $3 billion contribution to the project.

Diverting the tunnel money would be an “economic disaster for New Jersey,” Assemblyman John Wisniewski, chairman of the transportation committee, said in a statement.

The tunnel would create 6,000 jobs and take 22,000 cars off New Jersey’s congested roads daily, Wisniewski said. The project is “too valuable to be tossed aside,” he said.

“The idea that Governor Christie and his administration would even consider halting this tunnel project so he could avoid making the tough decision to come up with a transportation funding plan is as inexplicable as it is irresponsible,” Wisniewski said.

To contact the reporter on this story: Dunstan McNichol in Trenton at dmcnichol@bloomberg.net

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